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Mike Riehls

Employees lead cost-cutting ways


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November 29, 2012
By Brad Lindberg

Staff Writer

GROSSE POINTE SHORES — Accountants on the city council are crediting municipal employees for improving the community's financial situation.

"Department heads are participating in (cost-cutting) decisions," said Grosse Pointe Shores Mayor Ted Kedzierski, a CPA and attorney. "Department heads know the operational efficiencies better than anybody else, so they're best able to suggest changes that are going to save us money."

The Shores' fund balance increased last year despite more than a 3 percent decline in revenue, according to a routine audit for fiscal year ending June 30, by the firm, Abraham & Gaffney.

"Cost controls have worked and continue to work going forward," said Councilman Bruce Bisballe, chairman of the finance committee, a CPA and lawyer. "The fund balance increased last year with no (general fund) tax increase."

General fund revenue totaled $5,306,580, a 3.3 percent decrease from 2011.

The decline is due to the impact of lower property values on property taxes, which, for the second year in a row, amounted to 82 percent of municipal income.

Expenditures totaled $5,239,393, down less than 1 percent from 2011.

Yet fund balance, often called the rainy day fund, increased $205,116, equaling 11 percent of operating costs.

The percentage is up from 9 percent in 2011 and 3 percent in 2010.

"In the past three years, the city's added fund balance," Aaron Stevens, a CPA with Abraham & Gaffney, told the council Tuesday, Nov. 20. "To the city's credit, it's an upward trend in fund balance in difficult economic times."

On the other hand, the Shores falls below Stevens' recommendation that cities maintain a minimum 20 percent fund balance.

"That would equate to 60 days of operations before you would need to generate additional revenue," he said.

"The fact that we added $200,000 to the general fund balance was a testament to hard work by the finance committee, employees and department heads who participated in the process," Kedzierski said. "We're looking every which way to try to save money."

Savings came to this month's council meeting in the form of a city attorney from the firm, Foster Swift. The firm was retained for $20,000 less annually than the firm that had represented the Shores for 25 years.

No savings seemed too small.

Kedzierski credited Public Safety Director John Schulte for arranging $950 savings per year in a new contract for ambulance service bill collections.

Other cost savings resulted from retiring employees, including department heads, and rehiring them without benefits.

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